Calculating Individual Tax
Hilton and Winona B. Taxpayer will file a joint federal income tax return. Hilton, age 55, is a hotel manager. Winona, who is 54, is a vice president of a small accessory supplier. The couple comes to you in early December seeking tax advice.
They have received or will receive the following amounts:
Salaries H-95,000, W-125,000
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Interest on Town of Amherst bonds
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6,000
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Interest on Anheuser-Busch bond
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8,000
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Dividends from common & preferred stocks (domestic corporations)
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12,000
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Life insurance proceeds (H's mother)
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500,000
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Inheritance (H's mother)
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400,000
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Proceeds from sale of stock held four years (cost 22,000)
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10,000
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Itemized deductions-
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State income tax withheld from pay
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5,700
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Property taxes
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4,200
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Home mortgage interest
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5,500
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Charitable contributions (cash)
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4,600
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Hilton's employer withheld 12,900 of federal income tax, Winona's employer withheld 26,000. In addition, they paid federal quarterly estimates totaling 6,000 (1,500 per quarter).
Their 20-year old son, Steven, lived with them during the year except for nine months while away at college (qualifying as a dependent).
REQUIRED:
Assuming a joint return, compute projected taxable income, tax liability and net tax payable or refund due.
Attachment:- 1st HO- tax determination.pdf